Wednesday,
October 29, 2008
Italians Evade 100
The
ANNOTICO Report
Tax
evasion in
Of course the
The Italians have long held
their politicians in contempt, and are not as naive as Americans, so they are
convinced that Taxes paid to the Government are a Donation to Mainly
Corrupt Thieves, so it becomes a challenge to give as little to the Politicians
as Possible.
The figure for
2007 was a record. Inspectors recovered a total of 6.3 billion euros in a single year from tax evaders, up 50% on 2006.
There was another record in the first four months of 2008 as the tax agency
clawed back 800 million euros, an increase of 24%
over the previous year. It sounds like a lot but in fact it is very little,
considering that according to official figures from the ministry of the
economy, total annual tax evasion in
For example,
In any case,
there is little to be added to some of the cases Ippolito mentions. What can
you say about the free mattresses given away with a magazine at a cover price
of 2,000 euros, to exploit the special tax regime
enjoyed by publishing and pay VAT at 4% instead of 20%? Or the social clubs
that leverage their privileged tax status to act as fronts for business
enterprises with an annual turnover of 800,000 euros,
like the Oristano customs police social club? Italian
creativity knows no bounds. When a business needs customers, it simply makes
them up. At Giulianova, a mobile phone company
managed to evade 26 million euros thanks to false
invoices. And to look credible in the taxmans eyes the business claimed a tax rebate for a cool five million euros.
This sort of brassnecked cheek is far from unusual. It goes on even in the best
families.
Ippolito tells
the story of a couple in San Don` di Piave who faked
a gift to their daughter of two plots of land. The value was the same as the
taxable capital gain, 250,000 euros. It was a shame
that only a few days later, the astute young women sold the land on for the
same amount without generating any capital gain or tax liability. The homemade
scam was uncovered, but only because the trio deposited the cheques
from the final purchasers straight into mum and dads bank account.
In Italy,
its not hard to find casual workers who drive Porsches, or a 75-year-old
pensioner with a declared income of 1,000 euros a
month who has just ordered a 30,000-euro swimming pool, or a plumber declaring
3,000 euros a year who turns out to be pocketing
350,000. Perhaps these are isolated cases. Nevertheless, the sector studies
used to make the self-employed pay taxes on the basis of presumed income tell a
different story.
They report, for
example, 100,000 taxpayers who claim for the purchase of capital goods but
apparently do not own them. Among them are 3,329 restaurants with no kitchen or
tables, 480 chemists shops without shelves, 555 laundries with no washing
machines, more than 5,000 installation engineers with no pliers or screwdrivers
and 360 analysis laboratories with no equipment. There are even 137 taxi
drivers with no taxi. Tax inspectors are also honing their wits to staunch
The
not-so-indigent poor can be unmasked by blanket checks, like the one carried
out by the
In other words,
there is no civic conscience to aid the taxman. The inspection machinery is
making enormous progress but it still cant keep up with evasion. We only
have to look at the legal backlog. Even when the taxman wins in court, it takes
an inordinate amount of time to get the money. A final verdict in tax-related
cases emerges after an average of four years and when the figures are totted
up, they are pitiful. Out of 44 billion euros of
evaded taxes, the authorities actually managed to recover only 7.3%. Or to put
it another way, 92.7% of evaders who are caught still get away with it.
Mario
Sensini
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